Email Validation: how eliminating invalid addresses can boost your ROI
26
February

This post is also available in: Português Español

Can investindo in email validation systems bring positive results? Will it influence the ROI on your email marketing?

EMAIL VALIDATION SYSTEMS – Quite often, the email validation and verification market is questioned about the real return that it can bring to companies.

The following topics will be discussed in the article below:

  • Validation costs are not prohibitive;
  • Not validating your emails will affect your results;
  • Practical ROI comparison examples between validated and non-validated mailing list;
  • Other factors that influence on ROI;

Validations costs are not prohibitive

Ultimately: why invest your money in validating and verifying emails? Would that not only increase costs and reduce ROI rather than bring more profit to business?

This may be the initial thinking. However, it does not exactly work that way. There are important elements that contribute to this equation.

The first thing to consider is that the email validation service does not signify a high cost for the company, mainly due to the fact it is not a monthly cost, but a specific action for a specified email. So if the same mailing list is used for more than one action, this value can be distributed between them.

Not validating your email will affect your results

Opting to not scan your email addresses could lead to undesirable consequences, as your email marketing campaigns would be subject to email provider blocking and forwarding messages to spam.

For example, a 10% incidence of hard bounces in an email marketing campaign causes email provider blockades and the sent emails will only have 44% success rate to reach the inbox. Additionally, exhibiting fewer emails in the recipients inbox already impacts your results, even more so with email provider blockings such as soft and hard bounces.

Email marketing tools opt to perform blocking directly on customer campaigns that reach certain volumes of hard bounces. In some, like RD Station, only 3% of invalid emails are already sufficient for a delivery interruption. In others, such as MailChimp, by simply importing a database with bounces the client account is automatically blocked.

Imagine the impact of this type of barrier on your email marketing actions.

Practical ROI comparison examples between validated and non-validated email databases

Let’s imagine two scenarios: one without email validation and another one where emails have been validated on the mailing list. In both cases, a base of 80,000 leads will be used, with an average engagement rate of 18% (market average) and a 1% cumulative conversion rate, with an average ticket of US$ 200 per sale. You can even do your accounts by changing the average ticket, engagement and conversion rates to your reality.

For the costs, an average of R$ 300,00 will be given for sending the emails in an email marketing platform (average price offered for the Brazilian market, if your monthly volume of emails sent does not exceed 100,000), plus R$ 3,488 for creating the email publicity (this cost varies between R$ 500,00 and R$ 800,00 in the market, but the value suggested by Abradi-SP’s Guide to Reference Values ​​for Digital Services 2017 will be used).

To validate the mailing list of 80,000 emails, the cost in a platform such as SafetyMails is R$ 552.00, not including in the equation values ​​of purchases of mailing lists or hired email harvesting services, because SafetyMails does not recommend these practices.

Not validated scenario

Assume you sent a mailing list without validating the emails. If we take into account SafetyMails Research on Quality Mailing List Databases in Brazil, the, the average number of invalid emails in the databases reaches 32% (or 25,600 emails). Being modest in our example, we will continue with the average bounces needed for provider barriers in the market, which is 10% (8,000 addresses).

With this incidence of bounces, providers trigger their blocking mechanisms and the number of soft bounces (or temporary errors) can exceed 40%, but sustain an average of 22% (17,600 emails) of soft bounces per blocks.

In the case of 10% bounces, Return Path states, in a study, that only 44% (23,936) of the emails delivered will be directed to the inbox. The chance of a recipient visualizing an email in their spam (junk, spam, etc.) is statistically irrelevant. So we are only taking the inbox into consideration.

Applying the customer engagement indexes (18%) and conversion (1%) to the final numbers, will result in US$ 8,616.96 in sales.

In terms of ROI, the investment would be US$ 3,788.00. Applying the Return on Investment formula, the ROI of this share was 127.48% (or US$ 1.27 obtained for each R $ 1.00 invested).

Scenario with validation

Redoing the calculations with the same actions, but now with validation of emails:

When doing a validation, assume that the validation and verification emails platform has found the same 10% of bounces from the previous example. We would then have a final mailing list of 72,000 leads. Usually, the average number of bounces falls to less than 1%. For this comparison a bounce rate of 3% (2,160 emails) will be used. A 73% drop in the incidence of rebounds in the campaign has already been calculated.

Having a low volume of bounces would provide no blockages and loss of reputation. Therefore, soft bounces (temporary errors) would fall to an average of less than 4%, keeping 5% (3,600 emails) as an example title.

Without blocking spam and without reaching 10% of the bounces, the emails would have a delivery in the inbox of 79% (Brazilian’s average delivery in the inbox, according to a study of the Return Path). This implies, in our example, a total of 52,330 emails.

Applying identical engagement and conversion rates from the previous example, we would have US$ 18,838.66 in sales. A 119% increase in mailing list conversions!

To calculate the investment in the action, adding the value of the creation market publicity (US$ 3,488.00), the sending (US$ 300,00) and US$ 552.00 of the email’s selected, there is a US$ 4,340.00 investment.

In terms of ROI, the result is impressive: 334.07% (or US$ 3.34 for each US$ 1.00 invested). Comparing it with the first scenario, validation and email selection promoted a 162% growth to the ROI with only a 15% increase in share investment.

The numbers used in this comparative scenarios take into consideration important studies in the email market from respected companies.

Other factors that influence on ROI

Undoubtedly, using only an email validating system won’t be solely responsible for the growth of your ROI. Other factors are also involved and must be part of your assessment, such as planning your marketing campaign, “call to action” appeal,  lead capitation quality, the type of offers, market seasonality, sending settings, apropos timing, prospect segmentation and numerous aspects. However, in terms of mailing list quality, validating and verifying emails demonstrate to be highly efficient.